Siemens Synergizes UGS Corp

From the Dallas Business Journal Munich based Siemens (NYSE:SI) Europe's largest electronics and electrical engineering firm is buying UGS Corp. for an undisclosed amount. UGS currently employs about 7,200 people and is based in Plano, Texas.

Japanese Buying IBM Printing Division

From a The Denver Business Journal article by Bob Mook IBM is selling it's printing division to the Ricoh Company. The division employs 1,200 people which designs and manufactures printing machines for the publication industry and large invoice users.

No news has been issued concerning layoffs caused by combined "synergies".

Chinese Buying Up American Manufacturer Hoover

Techtronics, an Asian company, that is a major producer of floor-care appliances under the names Royal, Dirt Devil and Regina but is best known as a maker of power tools sold under the well-known brands Milwaukee and Ryobi.

In a Chicago Tribune article by staff reporter James P. Miller, Whirlpool which owns the Hoover floor care business, is selling it for $107 million.

Mr. Miller accurately described, in the article, the situation that low-cost foreign labor has put American manufacturers in:

“Part of the rise of low-cost floor-care producers can be traced to the growing importance of "big box" retailers in the United States. High-volume retail chains, such as Wal-Mart Stores Inc., Home Depot Inc. and Target Corp., routinely use their purchasing power to squeeze lower prices from suppliers. That situation puts companies with domestic manufacturing facilities, like Hoover, at a disadvantage.”

Hoover has manufacturing facilities in Texas, Mexico and it’s home base of Canton, Ohio. The Canton facility currently employs 850 unionized workers, and when these jobs are sent overseas, Canton will lose more than 850 quality manufacturing jobs. From Hoover’s web site:

“Today, Hoover employees carry on that legacy. Via the Management Charitable Fund and Employees' Civic Fund, they support the United Way, the area's fine arts organizations, college fund drives and other efforts.Employees serve on the boards of numerous non-profit agencies, including Goodwill Industries, the Better Business Bureau, The Cultural Center for the Arts, and the Stark County Board of Mental Retardation and Developmental Disabilities. In other volunteer activity, Hoover employees do everything from fighting fires to teaching Sunday school to serving as Big Brothers or Big Sisters to children in single-parent families.”

Will The Senate Change And Listen To Bernanke

Why should they change just when the party is starting.

Last Thursday Ben Bernanke, the Federal Reserves chief, testified before the Senate Budget Committee. He painted a grim picture for our kids and grand kids if the Congress continues to ignore basic financial realities. He said: “We are experiencing what seems likely to be the calm before the storm,”

What he is referring to is the projected increase, the government faces, in the costs associated with the very soon to happen retirement of the baby boomers. He further states: “These rising entitlement programs will put enormous pressure on the federal budget in coming years,”

Currently Social Security, Medicare and Medicaid together totaled about 40% of federal expenditures, or about 8.5% of America's gross domestic product. In nine years that amount is projected to increase to almost 50% and in 24 years to 70% of the total federal budget.

These numbers aren't new and won't take anyone by surprise, our enlightened elected officials have been using them as political fodder for ever. There are just ignoring them as they seem to ignore any other issue that might constrict their ability to spend more of our tax dollars.

The other concern is that while the deficit grows to meet these financial requirements, the government will have to borrow more, by issuing more bonds, thus paying a larger portion of its budget in interest. (We all know that as demand increases, so does it’s cost.)

Bernanke also said: “Thus, a vicious cycle may develop, in which large deficits lead to rapid growth in debt and interest payments, which in turn adds to subsequent deficits,”

Health Insurance The Wild Card

An Associated Press story, no author given, discusses some of the problems presented by governments attempting to mandate solutions to the current lack of health care insurance in this country. The estimates of how many people are currently without any health coverage varies but approximately 60 million would be a fare number. What’s is even foggier and receives almost no media coverage are the numbers that are under insured. As employers and consumers fight to lower costs, insurance companies respond by offering plans that have restricted benefits and coverage.

As illustrated by writer Chris Lindberg article in People's Weekly World Newspaper:

“Recently a young family celebrated the birth of their child but soon received the sad news that the baby needed heart surgery. Their concern escalated when their health insurance company refused to pay for the surgery. Why? Because the heart problem was a “pre-existing condition.” Read on.”

“Tracy Pierce, 37, lived a full life. He grew up with family and faith. He went to a Catholic school, got married, had a son, and he even had the car of his dreams. It was the perfect life,” reported the Frankfort Indiana Times. But then Pierce was diagnosed with kidney cancer. For 15 months he suffered, while every treatment his doctors sought for him was denied by his insurance provider. First-Health Coventry deemed the treatments were either “not a medical necessity” or experimental. Even at the last stages of his life, he went without oral morphine for more than a week, because his insurance would not cover it.”

It been documented that over the last 6 years 11.5% of employers have dropped employer sponsored plans and nearly all have addressed the increase in costs by, either or both, reducing coverage benefits or transferring costs to the employee.

As state and now federal governments try to respond with an array of ideas and programs, solutions will get bogged down with a slew of litigation from health insurers, small business organizations, medical associations, pharmaceutical companies and political opponents which feel their solutions are superior.

In the last twenty years medical costs have increased more than double the inflation rate, and we all have heard or experienced how an illness at the end of someone’s life have wiped out an entire life work. We all should have adequate health coverage but the excesses in the medical system have to be addressed also.

Not Just Manufacturing

As reported on by David Wighton of FT.com, New York could lose 60,000 jobs in its financial district to London and other financial centers within the next five years.

In a study by McKinsey Consultancy, a global relations firm, Mr. Wighton reports: “The report, published on Monday, says New York has also been losing out in areas such as derivatives, where Wall Street chief executives say they have been shifting business to London because of its more attractive legal and regulatory environment.”

Also quoted from the article: “McKinsey based the report partly on interviews with 50 financial services chief executives. There was a consensus that New York had become less attractive than London over the past three years, and many expected the trend to continue.”

Call Centers: The Best And The Worst

From a CRM Lowdown survey of the ACSI ,The American Customer Service Index, the list of something we all have complaints about, calling for service on anything.

The Best: 1. 1-800-Flowers.com 2. General Electric 3. Citibank 4. IBM 5. Southwest Airlines 6. Direct Television 7. Verizon 8. Apple 9. American Express 10. Accenture

The Worst: 1. Dell 2. Comcast 3. AOL 4. Vonage 5. Dish Networks 6. Macy’s 7. e-Bay 8. AT&T 9. Home Depot 10. Compaq

North Carolina Gets Googled At A Cost Of $18,873 Per Employee For 30 Years

What governments have to do to get jobs.

North Carolina has pulled out all stops in an effert to bring business into their state and are willing to gave up some of their coveted taxes to attract quality jobs.

Jonathan B. Cox a staff writer for The News & Observer writes: “After more than 13 months of secret negotiations with state and local governments, Google has agreed to build a $600 million computer center in Lenoir.”

“State, city and county governments slashed Google's tax bill -- potentially more than $100 million over 30 years -- to win the project and the 210 jobs it is expected to create within four years.”

The hope is that Google’s server farm will attract other high tech businesses into the area.

Pfizer Has No Cure For Michigan’s Headache

World wide Pfizer will be amputating 10,000 jobs. John Gallagher a writer for the Detroit Free Press pens an article about Pfizer Inc.'s surprise decision to eliminate 2,410 jobs in Ann Arbor, Kalamazoo and Plymouth Township.

This will be a big hit for the Ann Arbor area which will lose 2,100 highly skilled jobs which ranges from $50k to $100k in annual salary. It is also estimated that the closure of the Ann Arbor facility will also generate 1,000 additional layoffs in all the services from food to construction that they currently contract for.

Besides the facility in Ann Arbor, Pfizer will also close their facilities in Brooklyn & Omaha.

Buy American And Save A Water Department.

One of the best articles I’ve recently read about the side effects of the textile and apparel job losses in North Carolina is from WaterWorld. In the article referencing the Winston Salem Journal, states that when an apparel company which employs 300, the County will lose $960,000 in revenue to its water/sewer department. The article gives some good statistics on North Carolinas 20 year battle of losing jobs to foreign manufacturing.

This time it is only 300, but the accumulative effects of these layoffs filter down to our schools, roads and yes, even the water department. The shortfall in taxes and fees has to be made up somewhere, either through tax increases or with decreases in services.

Slowdown In Construction Is Not Having An Effect?

Slowdown In Construction Is Not Having An Effect?

Stock Building Supply will be laying off a total of 3,500 people as the decline in construction is filtering, although slowly, through the economy. These layoffs are all in the Raleigh-Durham area and should have a significant effect in an area that has endured continual layoffs.

The Triangle Business Journal stated that a previous announcement originally called for 2,000 layoffs but was increased to 3,500. Ferguson, the plumbing division of Wolseley plc the owner of Stock Building Supply, also annouced layoffs of 500 in Virginia.

Not Just Another “Need More Education” Article

Kudos to Robert Martin who penned an article in the Business First of Buffalo titled “U.S. education crisis hurts job competition”

Nearly every article written about our countries need for education is directed towards producing more Doctors, Engineers and Scientists. That’s great but not everyone is going to end up with a higher degree. Somewhere between there and where we are today our educational system has lost focus on what our children should learn to become successful in this world and not the world as they think-it-should-be.

I am constantly amazed at how bad people are at math or how difficult it can be for some people to write a simple answer on an application. Mr. Hartley expresses that opinion well and it would be well worth it to click on his article and read it.

New Mexico Pulling It Together

Betty Sparrow Doris has just became the Labor Secretary of New Mexico and plans to pull all the different departments, bureaucracies, programs and organizations that deal with persons who are unemployed, displaced, seeking a job or requiring workplace training together and put them under one roof.

It is a constant theme here that governments often refuse to consider the needs or ease of the people they serve. Instead we find various department or agencies actually fighting with each other and using unemployed or displaced worker as a pawn.

Federal Assistance For Displaced Workers

In the Business First of Buffalo article “Displaced auto workers may receive federal aid” by Thomas Hartley. There are quite a few workers that may qualify for federal aid through the TAA and the ATAA assistance programs. Even if you are being laid off by a small shop, it only takes a group of three to partition for assistance. If you don’t make it, being turned down may then qualify you for other programs.

Check out the governments site for yourself: U.S. Department of Labor Employment & Training Administration

Finally Textiles Layoffs Bottoming Out

In this article in the Business Journal of the Greater Triad Area, written by Matt Harrington mass layoffs that have devastated North Carolina are almost over. As posted earlier the state and regional governments and agencies have gotten their act together in attracting quality jobs to the state to replace these lost jobs.

Employers Take Note

Here are a couple of articles that help attract, keep and lower employee costs and turnover.

In the Dallas Business Journal by Lisa Tanner a Staff Writer: Programs that create healthier employees can mean big reductions in health insurance costs.

Review education and training strategy for 2007 in the Birmingham Business Journal by Gerriann Fagan states that a company that provides a program for educational assistance to their employees, demonstrate gains in recruiting, productivity and turnover.

The Sun Belt Is Doing It Right

Here’s another success story coming out North Carolina. “State dangles $15M to lure electric car plant” in the Triangle Business Journal by Amanda Jones Hoyle. Tesla Motors Inc. is considering North Carolina as the future home for it’s $100 million plant to build it’s Tesla Roadster electric car that gets up to 135 miles to a gallon of gas.

North Carolina that was devastated by the loss of textile manufacturers, but it seems that they have gotten their act together in attracting quality jobs to their state.

I only wish that local politico’s, here in Pennsylvania, could be half as smart. The only thing that seems to get their tails wagging is slots.

I don’t get it. Here’s a lesson on how to make $50 mil. disappear.

And what is it (Just ask Pres. Clinton, he seems to have a good handle on the”its” in this world). Anyway, in an article by Patrick Hogan in the Triangle Business Journal, Senator John Edwards has chosen a Chapel Hill location as the headquarters for his 2008 run towards the presidency.

Along the way they will also have to open regional offices across the country, hire a 100 people and have hundreds of volunteers.

Carter Wrenn, a Raleigh Republican political consultant who was campaign manager for Steve Forbes' unsuccessful presidential bid in 1996 says: “It's like building and staffing a $50 million company in a matter of months… and it disappears two days after the election."

That’s not all that disappears, along with our tax dollars we will also lose another chunk of our dignity.

Imagine That – Governments Making Sense

Laura Williams-Tracy , a contributing writer for the Charlotte Business Journal writes in her article “Rapid growth in Cabarrus aids region: Marshall” about the Cabarrus County, North Carolina Commerce Department. The article is based on an interview with Jonathan Marshall who oversees the department.

From the article it seems that Mr. Marshall has pulled “county functions from planning to building inspections, sediment and erosion control, zoning and community development, all under one roof.”

The county has also taken a step back and looked at their infrastructure; transportation, water and sewers, schools and universities, electrical, communications, housing and land use mix, are all considered to determine the direction that their growth should take.

How smart is it that businesses can go one place for all their permits and know that all of the peripheral issues that are important to the people that are their business are accounted for.

Kudos to Jonathan Marshall

New Threads For The Neglected Guy

Finally, us guys have had to do with tattoos, piercings and cut-offs shirts to individualize their style. But Reuters reports on a mens fashion show by Dolce & Gabbana that attracted over a 1000. With many buyers in attendance get ready to re-style your guy.

Some quotes from the article: “Sharp-lined suits echoed the space theme, also using metallic colours, while razor-thin ties in black, gold and gun metal over white shirts poked out under both the jumpsuits and the slicker suits. There was metallic knitwear -- in both chunky, country-style shapes and slim-fitting.

"I was a bit overwhelmed that there was so much stuff that just looked fantastic," Shears told Reuters after the show.

He picked out bronze metallic suits and white leather lean tailored jackets over jeans as especially attractive to wear.”

Isuzu Taking Advantage Of The Underemployed In Birmingham

From the Birmingham Business Journal, Tiffany Ray reports that Isuzu purchased a large plant in Birmingham and may set-up shop there. What is evident is that a large group have the cojones to show concern for the average guy.

As quoted from Frank Woodson, Assistant Director of a non-profit Young Business Leaders: "Part of the way we fight crime and blight within the Birmingham urban community is to provide jobs that pay a living wage,"

Woodson further adds: "When children see that there are employment opportunities there, education becomes more important,"

Larry Holt, director of research for the Birmingham Regional Chamber of Commerce, adds the obvious: "Any time you have that significant of a capital investment and jobs created in the area, that's obviously a huge positive for the area."

Woodson noted that the unemployment rate does not count people who have dropped out of the work force and are not seeking employment, nor does it take into account underemployment. "To me, (underemployment is) just as bad as unemployment as far as the impact on the community because it keeps parents out of children's lives,"

Small wonder that in November 2006, Alabama's unemployment rate was 3.2 percent, down from 3.6 percent the same month the year before. The Birmingham metro area posted a jobless rate of 2.8 percent for the month, compared with 3.2 percent in November 2005.

The 20 Best Paying Jobs

In a study conducted by Bizjournals - January 8, 2007 and written by G. Scott Thomas they compare the 20 top paying positions to various areas around the country. What’s interesting is what these 20 jobs are as listed in this chart. If you have kids, this chart should be printed and stuck on everyone’s refrigerator door so your kids can see exactly what they can expect from their career choices.

Economics Can Be Difficult

Robert Samuelson writes in an article “The Economic Mega-Worry” on REAL CLEAR POLITICS about another worry on the American economic front. Productivity is a concept that is often referred to in statements made by Ben Bernanke or the former Fed’s Chief Alan Greenspan, but never seems to add much meaning.

Mr. Samuelson does a very good job of explaining the effects that productivity can have on our future and the future of our kids. He illustrates that a 2.5% rate over the next 28 years would result in an average income of $73,000 for our kids. If productivity slows to 1%, then the average per capita income would only be $48,000.

Productivity can have a huge effect, what Mr. Samuelson fails to expand on is exactly what, as an average everyday American, we can do about it. It would seem that an increase in demand for American made goods would result in a higher GDP and productivity gains would follow.

Interesting View Of Career Advancement

Two things that are left out is Effort and Commitment. Anything that is worth having takes effort. Success rarely happens by accident, the eight steps in by Jaclyne Badal’s article, in the The Wall Street Journal Online, outlines eight common sense actions (actions mean getting actively involved) that someone can reasonable do to advance their career. Commitment is similar to a goal but without a specific target. If you can always ask yourself if what you are doing is advancing your career, then you are on the right road.

A View From Across The Pond

It’s good to know that when comparing the U.S. ecomony to the worst statistics in the bunch, that we’re just not that bad. Let’s do better guys. With a little work and help from Uncle Sam, we can get to the top of the worst performers list.

Nariman Behravesh of The Financial Times, a major UK business news outlet, printed an article “The gloom about America's economy is overdone”. Some interesting comparisions are presented in this article to the other major players in the Group of Seven. The Group of Seven are the countries that control the World Bank.

Here’s a quote that symbolizes the current populists view of the US economy: “To begin with, in the past decade the resilience of the US economy in the face of repeated shocks has been remarkable. The shocks have included the emerging markets crisis, the meltdown of Long-Term Capital Management, the worst bear market since the Great Depression, one of the worst terrorist attacks in history, corporate scandals, war, hurricanes and record high oil prices. Now, the worst housing recession since the late 1980s does not seem to be dragging down the rest of the economy.”

Some of the interesting statistics in the article are:
1. That the US savings rate is and has has been lower than Finland, Denmark, Australia, Italy, Japan, Canada, South Korea and Australia.
2. Indebtedness of the much-maligned US consumer is ONLY 130 % of the average US after-tax income.
3. In 2006 the US budget deficit is expected to have been 1.9 per cent of gross domestic product compared with 2.1 per cent for the eurozone, 3 for the UK and 4.6 for Japan.
4. Gross government liabilities as a share of GDP were about 65 % compared with 50 % for the UK, 63 for Canada, 77 for the eurozone and 175 % for Japan. The US fiscal situation is better than the Group of Seven average.
5. However, there is a problem - the US current account deficit. At about 6.5 % of GDP, it is much larger than in any other advanced economy except Spain. While most economists would agree that this deficit is unsustainable at current levels.

Much Needed Good News For Manufacturing

Bloomberg News reported that Toyoto may build as many as five new plants, over the next ten years, in the U.S.. They also state that the desicision is near for a new assemly plant that will produce as many as 200,000 SUV’s in Georgia.

Free Speech Kids Out Of Control

Last week a group of singers, a close-harmony group from Yale University, were ambushed and beaten up while on tour in California. This is only one of many such incidents that have occurred across the country. There have been numerous reports from our universities of students gone-wild while protesting their right to free speech and trying to stop someone else’s. This covers everything from Jim Gilchrist’s talks about border security, to pro-life groups, religious activities, gay-rights and anti-terrorists groups.

Consumers Come Through Again

From an AFP article on Breitback.com the U.S. consumer came through with a .9% increase in the critical December Christmas sales that our economy needs to keep booming. Electronics led the way but the real winners are Visa and Mater Card with the average U.S. consumer is dept to the tune of 130% of their average after-tax income.

Strong Gadget Demand Lifts Retail Sales

An AP article by Martin Crutsinger

E-mail to Sylvester Stallone

Dear Mr. Stallone:

First congrats on your new movie, I’ve enjoyed your work for years.

The reason for this correspondence is the statement you made in Mexico about the proposed border fence. Like you, I was proud that America had open and free borders, and the only reason I am pro-fence now is one of pragmatism.

We have had numerous immigration laws, both federal and state, and they have proven to be unenforceable. On the other side we have attempted several “amnesty” type programs allowing illegal aliens a way to stay here legally and provide a path to citizenship. These programs have met with the same success that our enforcement attempts have. And now we are at the point where both solutions are unmanageable. The last thing we need is more unenforceable law.

If you favor an amnesty or an enforcement type of solution, it just doesn’t matter, because both will fail without a secure border. Unfortunately, either approach would take an enormous bureaucracy and would still have a poor chance of success, but there would be no chance of success without a secure border.

The only other choice is to forget we have a border, what do you think the consequences of that would be.

Respectfully,

This Ain't Your Daddy’s Oldsmobile

Or his job at Oldsmobile, or GM, or Ford, or Chrysler

Now that the new year has arrived, all of the American auto makers are issuing their sales figures for 2006. GM down 9.6%, Ford down 8% and Chrysler down 7%. The American automotive worker down ¼ million jobs. Toyota which posted record-breaking US sales of more than 2.5 million vehicles in 2006.

Thomas Hartley of Business First of Buffalo wrote: “Not since the end of World War II, when the nation's military economy reverted to a consumer economy, have automakers and suppliers faced an economic tsunami like what hit them in 2006 and 2007.”

Mr. Hartley also writes that at Delphi Thermal Systems Inc. “more than 1,330 - or 87 percent - of the 1,900 eligible production workers… took buyouts and incentives to leave by Jan. 1, 2007. Some of the loss was offset by 900 lesser-paid workers who were hired after June. But most of the new hires receive $14 an hour - half what the workers who left or are leaving were paid.”

In an AFP article on Breitbart.com: “The world's biggest auto show revs into gear this weekend with US carmakers facing a tough job to protect their home turf from determined Asian challengers.”They further write: “Japanese makers Toyota, Honda and Nissan, and South Korea's Hyundai, are all planning major introductions of new models as they seek to whittle away further at the dwindling market edge enjoyed by the Detroit giants.”

Some Uncommon Common Sense About The Economy

Mr. Armentano takes, in our opinion, a realistic view of the 2007 economy without falling into the more common rhetoric of “business as usual”, in his article printed in the East Bay Business Times - December 29, 2006.

He emphasizes that poor economic policy causing an overheating of the housing market and the subsequent over-cooling, that we are experiencing now, as the primary cause for an upcoming recession. He then makes the case that autos will be the next sector hit which we are already seeing. In the last six months autos have laid off 95,000 people, and less published is the auto parts manufacturers that have been streaming their operations out of the United States.

Unlike other forecasts Mr. Armentano states that a hit on the exuberant stock market will be the spark that sets off the upcoming recession. I’d like add that even though this stock market rise is not a “bubble”, but is grounded in some solid corporate performance, the key indicator that is near it’s top is that every Joe and Jane out there is pumping everything they have into it. It’s just when everyone thinks that they are the world’s best investor, is when the world proves them wrong.

Dominick T. Armentano is professor emeritus in economics at the University of Hartford (Connecticut) and a research fellow at The Independent Institute in Oakland.

Rosy 2007 Predictions

In the Cincinnati Business Courier - December 29, 2006 by Keith Wirtz here’s an article that lists 10 of the more popular predictions that are being presented by the MSM recently. These 10 come from Keith Wirtz who is president and chief investment officer of Fifth Third Asset Management. They add an eleventh prediction about baseball.

1. U.S. stocks exceed consensus expectation and rise substantially in 2007.
2. The U.S. economy moderates but doesn't stall -- expect growth of 2.9 percent or better.
3. Companies continue to post strong earnings results in 2007.
4. The Federal Reserve initiates a shift in policy by cutting rates.
5. The housing market does not collapse, but instead goes soft.
6. Middle East tensions rise as the regional conflicts become more sectarian, less national.
7. Corporate mergers and acquisitions continue at a phenomenal pace.
8. The U.S. dollar moves lower on a trade-weighted basis.
9. Americans finally get serious about savings.
10. The Year of the Subpoena.
11. Major League Baseball dominates the sports scene in 2007.

We sincerely hope that Mr. Wirtz is correct. Each one on these deserves further discussion

Kudos to John McLaughlin

This week John McLaughlin came out with a number of “Best And Worst Of 2006”. The one that caught my attention was “What was the most under reported story of 2006”. Here John McLaughlin got it right with his choice being the gross under reporting of the effect that the Trade Deficit and Offshoring is going to have on the middle class worker.

He felt that the Main Street Media is totally missing the dangers that are right in front of us and is glossed over by the more prevalent view that globalization is good for the United States.

It’s Going To Take More Than Rebalancing

Robert J. Samuelson of Newsweek wrote an article: Rebalancing the Economy. In the article Mr. Samuelson questions the popular view among economists that the economy, in the United States, will have a soft landing in 2007. The most recent prognosis for 2007 is that growth, as measured by the GDP, will fall between 2.6% and 3.2%, interest rates will be within ½ point of where they are now and inflation will not be a factor.

Mr. Samuelson lists three items that could have a negative impact on fairly rosy predictions for 2007: 1.) Real estate, it’s the one wild card that everyone agrees on. 2.) Autos, some feel that there is pent up demand that will boost automotive sales this year, but few think that any upswing in auto buying will help American manufacturers. 3.) Trade deficit. Contrary to contemporary opinion that it just doesn’t matter, he considers the massive outpouring of US dollars as having the potential to destabilize the economy in several ways.


The above influences are real and can have broader and deeper effects on the economy than is discussed in the article, but the one factor that’s not covered is the outpouring of jobs. If something does cause us to slip into a recession, what sector will pull us out.